10 Secrets Auto Insurance Companies Don’t Want You to Know

Car insurance pricing can be complicated, and one size does not fit all. Insurance companies use a variety of factors to calculate your specific coverage.

Some added expenses may be obvious, but here are some tips that may help you save on car insurance that fly under the radar — and can seem a bit unfair.

Here are 10 things your car insurance company may not be telling you. Keep reading for all the inside tips so you can keep more cash in your wallet.

An insurance provider will need to know the make and model of your car, and if your vehicle has high-end extras, that could translate to higher insurance costs. 

They may also consider the car’s safety rating, the year it was made, and its likelihood of theft. Depending on what they are, those could lower your insurance cost.

Many factors affect car insurance rates, so if you’re considering a new car, check on the finer details pertaining to the vehicle before committing.

Your insurance cost could differ depending on whether you live in the country or a city. High-density areas have an increased chance of accidents, so the rate reflects that risk.

In addition, in states like Michigan — where instances of insurance fraud and uninsured drivers are more common — insurance costs are higher than the national average.

Teenage drivers have the highest crash rate of any age group, which is why adding your teen to your policy could impact your wallet.

Do some additional shopping to check if the cost of having a policy with a teen may be lower with a different provider, or ask your current provider if they offer a discounted rate for multiple drivers.

Some insurers reward teens with good grades with a discount.

This one, actually, is on the banks.

If you took out a car loan, the bank may require you to carry extra collision coverage or additional premiums to ensure their loan is protected in the event of an accident.

Check with your bank before you sign a loan for your car to see what kind of insurance coverage they may require you to carry.

Insurance companies can access two databases: LexisNexis Comprehensive Loss Underwriting Exchange (CLUE) and Verisk Automated-Property Loss Underwriting System (A-PLUS). 

Both databases let them see if you’ve filed a claim or been in an accident, which they could factor into your insurance costs. 

These reports can show companies up to seven years of claims, so switching providers may not help you dodge a previous issue.

Pro tip: You can request a free copy of your Consumer Disclosure Report from LexisNexis and Verisk A-PLUS loss history report to see what information insurance providers have access to and if any corrections need to be made.

You could think you’re getting a “loyal driver” discount by staying with the same insurance provider for several years, but you may want to do some comparison shopping. 

While loyalty is important, it also demonstrates to providers that you’re comfortable where you are, which is something they may use to increase your rate.

Try renegotiating if you notice an increase, or compare rates with other providers to see if moving on could save you money.

Some insurance companies allow you to add monitoring devices in order to access safe driver discounts. These devices or apps may track how many miles you drive, if you brake hard, or when you’re on the road.

Details like these are translated into data points for the insurance company to evaluate. But in some states, insurance providers may also be able to use this information to increase your rates depending on any negative driving habits they may discover.

Know the specific details about the state where you reside before choosing to go the monitoring device route.

If you want to cut your insurance costs, it can be helpful to be proactive about any potential discounts you can receive.

Call your insurance company to find out if they have unadvertised offers you aren‘t taking advantage of, such as good student or loyal customer discounts.

Insurance companies may contend that a driver’s credit score could reflect their ability to pay premiums or even how risky they are to insure.

An insurance provider may deem someone with a poor credit score a greater risk, which could factor into rate calculations.

Learn about what constitutes a good credit score and how you could improve it if you’re worried about how it could affect your insurance rates.

Lower car insurance premiums may sound great if it means you’re paying less than your current plan, but make sure you compare more than just your monthly costs.

Lower premiums could mean you have a plan with a high deductible, and you may have to pay more out of pocket for any repairs or damage before your insurance kicks in.

Knowing how car insurance works and what factors a provider considers can be a good way to reduce your costs. 

Look over your profile as a car owner and think about details that may affect your rates. And finally, comparing rates from different companies is a smart car owner move so you can see which can offer you the best coverage and prices.